Investing.com -- U.S. stock futures drift as a strong trading year approaches the close, while Apple is freed to sell its smartwatches, at least for now. Xiaomi looks to move into the crowded Chinese EV market, while crude prices and the dollar continue to head lower.
1. Futures mixed; strong annual gains likely
U.S. stock futures traded in a mixed fashion Thursday, with moves limited as investors prepare for the end of what has been a strong year on Wall Street.
By 05:05 ET (10:05 GMT), the Dow futures contract was just 5 points, or 0.1%, lower, while S&P 500 futures had gained 7 points, or 0.2%, and Nasdaq 100 futures had risen by 55 points or 0.3%.
The three main indices had another positive session on Wednesday, with the blue-chip DJIA gaining over 110 points, or 0.3%, the broad-based S&P 500 index rising 0.1% and the tech-heavy Nasdaq Composite climbing 0.2%.
The averages are all on track to notch their ninth straight winning weeks, in what has been an impressive late rally.
The DJIA and S&P 500 are poised to end 2023 higher by 13% and 24%, respectively, with the latter within 0.5% of its highest closing level, which was set in January 2022. The Nasdaq Composite has jumped an impressive 44%, boosted by a rebound by the mega-cap tech names.
These gains have been driven by raised expectations that the Federal Reserve will start cutting interest rates early in 2024, and investors will study economic data on jobless claims and pending home sales later in the session for further clues.
2. Apple freed to sell smartwatches, for now
Apple (NASDAQ:AAPL) received a boost Wednesday when a U.S. appeals court paused a government commission's import ban on the sales of its flagship smartwatches following a patent dispute with Masimo (NASDAQ:MASI) over its medical monitoring technology.
This decision allows Apple to continue importing and selling infringing Apple Watches while the court considers whether to put the ban on hold for the duration of the appeals process.
"We are thrilled to return the full Apple Watch lineup to customers in time for the new year," Apple said in a statement.
Still, a final decision could cost Apple millions of dollars and potentially force a settlement or some kind of technological workaround by the tech giant.
3. Dollar hits fresh 5-month low
The U.S. dollar retreated to a fresh 5-month low Thursday, on course for an annual loss of just under 3%, snapping two straight years of strong gains.
At 05:05 ET, the US Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.3% lower at 100.370, down at levels last seen in July.
The prime driver for the recent dollar losses was the unexpectedly dovish stance the Federal Reserve took at its December meeting, opening the door to rate cuts next year.
Other major central banks, including the European Central Bank and the Bank of England, have also ended their series of rate hikes, but they have also tried to emphasize their inflation-busting credentials.
Markets are pricing in a 88% chance of a Fed cut in March 2024, according to CME FedWatch tool, while futures imply more than 150 basis points of easing next year.
There is more U.S. labor market data to study later Thursday, in the form of weekly jobless claims, but the key to the dollar’s outlook will be the pace inflation falls in 2024.
4. Xiaomi seeks to diversify into EVs
The Chinese auto market is set to get even more crowded after smartphone maker Xiaomi (OTC:XIACF) unveiled its first electric vehicle earlier Thursday, and announced ambitious future plans.
"By working hard over the next 15 to 20 years, we will become one of the world's top 5 automakers, striving to lift China's overall automobile industry," Xiaomi Chief Executive Lei Jun said at the launch event.
The new car, to be known as the SU7, is expected to make the most of its shared operating system with the company's popular phones, and occurs as the phone company seeks to diversify beyond its core business to EVs.
5. Oil retreats ahead of U.S. inventories
Oil prices drifted lower Thursday as traders digested continued tensions in the Red Sea as well as further evidence of growing U.S. crude stockpiles.
By 05:05 ET, the U.S. crude futures traded 1.1% lower at $73.31 a barrel, while the Brent contract dropped 0.9% to $78.86 per barrel.
Prices dropped nearly 2% on Wednesday as major shipping firms began returning to the Red Sea, however disruptions still remain over fears of further attacks by Yemen's Iran-backed Houthi militia on ships in the region.
Germany's Hapag Lloyd said on Wednesday it still believes the Red Sea is too dangerous and will continue to send ships around the Cape of Good Hope.
Away from the Middle East, data from the American Petroleum Institute industry group on Wednesday showed U.S. crude stocks rose 1.84 million barrels in the week ended Dec. 22.
Official numbers from the Energy Information Administration are due later Thursday, after having risen by 2.9 million barrels the prior week as U.S. crude output rose to a record 13.3 million barrels per day.